Publisher Thomas Gorman says Hong Kong offers unique advantages to new entrants to the China market

FORTUNE China publisher Thomas D. Gorman is a 29-year veteran of the China media and marketing scene. As chairman of CCI Asia-Pacific Ltd, the company he co-founded in Hong Kong in 1975 to tap the mainland's anticipated demand for international business and technical information, he explains why Hong Kong is still the best platform for doing business in China.

'I came to Hong Kong in 1974, having studied Chinese language in the US and after graduation working for a year as a journalist. My career interests revolved around China and publishing.

My original plan was to stop in Hong Kong, proceed to Taiwan, and then head back to the US. This changed when I accepted a job offer from a Chinese entrepreneur with business interests which included magazine publishing.  He gave me a great start in Hong Kong. Sadly, however, he passed away about a year later.

I nearly returned to the US at that point, but instead decided to form a publishing company with several partners, including my late boss's widow. Our vision was that China would open up sooner or later, creating a market for imported technical and business information.  Hong Kong seemed an ideal platform.

I give Hong Kong credit for turning me into an entrepreneur. Vocational aptitude tests taken when I was a teenager suggested my likely career path would be a forest ranger or librarian. Hong Kong's entrepreneurial energy was clearly contagious and transformational. 

Branding a key factor

CCI Asia-Pacific Ltd started out as publishers of Chinese editions of US and European technical and trade magazines for distribution in China, as well as providers of various support services. In 1996, we launched FORTUNE China under licence from Time Inc. It has been a great success, partly due to the tremendous interest among China's top executives in world-class management ideas and information. Another key factor is the power of the FORTUNE brand. Circulation is 110,000 copies each month, and an online version is available as well.

Hong Kong has always offered an enormous advantage as a base for doing business with China, due to the free circulation of information, the legal infrastructure, efficient business environment, low tax rates, transparent tax and regulatory regime, and more.  

Most of those advantages are still intact and relevant.  However, since the mid-90s, China has opened up considerably, and developments at provincial and municipal level are too many and varied to effectively keep track of from any single location. That's why a successful strategy today combines the strengths of Hong Kong and a variety of cities in the mainland. 

The most important  lessons I've learned in doing business in China are these: either take  a long term view of the China market, or remain on the sidelines; be careful choosing those in whom you place your trust, and; when you think your market research is complete, it must be time to begin the next phase of your research. This is a very fast-changing market in which adequate data is not easy to come by, and ongoing market research is extremely important.

Cost-effective advantages

Hong Kong continues to have a variety of unique and cost-effective advantages, including its relative absence of corruption, its transparent and accountable legal and regulatory regime, and the efficiency of its workforce.

I think most new entrants to the China market will be able to find one or more unique advantages which Hong Kong offers them. It is important for newcomers to study very carefully the total costs, direct and indirect, of doing business in Hong Kong versus mainland cities, to ensure they are comparing "apples with apples". 

As for lifestyle, Hong Kong is the ideal East-West cultural melting pot. It is also a very open and accepting society, with great international schools that offer kids the chance to grow up in a truly cosmopolitan environment.'

Related link:
CCI Asia-Pacific Ltd